For McCain, A Pain In the Fannie May Be Just the Beginning

McCain’s “bold” attempt to change the playing field by “postponing” his campaign so he can help negotiate a “bipartisan” bail-out plan (his statement announcing this selfless entreaty managed to invoke 9/11 and patriotism in one breath; Rudy would be proud) has been called out by pundits as a naked attempt to reverse his sliding poll numbers. This loss of footing has been attributed in part to his sophomoric reaction to last week’s implosion of the financial institutions (see George Will), and to contraction in the Palin phenom.

Not turning up in the polls, at least not yet, is the fallout from this story:

The New York Times revealed on Monday, September 22rd, and Tuesday, September 23rd that John McCain‘s campaign manager Rick Davis received regular payments from the failed mortgage company Freddie Mac from the year 2000 up until August 2008, contradicting candidate McCain’s own statement on the situation. Davis was paid directly from the year 2000 through 2005, after which Freddie Mac made payments to Davis’ lobbying firm.

Senator John McCain had told the Times on Saturday, September 21, that Rick Davis, the CEO of McCain 2008, had not been associated with Freddie Mac for several years. The revelation that McCain was wrong has proven to be a major gaffe. The Chicago Sun-Times reports that Davis, who had been scheduled to attend today’s luncheon for reporters in Washington, D.C. sponsored by the Christian Science Monitor, had canceled his appearance.

Up until its seizure, the Federal Home Loan Mortgage Corporation (colloquially known as Freddie Mac) had been paying Rick Davis’ lobbying firm, Davis, Manafort & Freedman, $15,000 per month. According to two anonymous sources quoted by the Times, the payments were made to retain Davis as a lobbyist, and specifically, to gain access to John McCain.

Freddie Mac and its sister corporation, the Federal National Mortgage Association (a.k.a. known as Fannie Mae) were seized by the federal government earlier this month in an attempt to bolster the troubled home mortgage market that triggered the recent Wall St. meltdown. The takeovers added $800 billion to the federal debt.

At the time Rick Davis’ relationship with Freddie Mac started , John McCain was the powerful chairman of the Senate Commerce Committee. In an arrangement evocative of the Keating 5 scandal that involved McCain and four other U.S. Senators, Freddie Mac was paying for access to powerful politicians on both sides of the aisle who could forestall Congressional intervention into their business.

Up until now, the lobbying connections among McCain’s inner circle had amounted to a sidebar story, fodder for Obama supporters, good government geeks and lefty rags like Mother Jones. But bless ’em, they were onto something. Then came the fall of Fannie Mae and Freddie Mac and everyone else, and the neurons started crackling and popping and making all the necessary connections. The McCain people snapped back at the press this week at first like a wounded animal — I mean, ironically, Fannie and Freddie are the only villains that Republicans, particularly the brand found at The Corner, who still seem hostile to the idea there even is a crisis — can agree on. McCain can rail against these quasi-governmental behemoths quite heroically, but where does his cred go when it turns out his top man was in the tank for Freddie for nearly a decade? Paid tens of thousands of dollars to keep McCain and other lawmakers from leaning on the mortgage giant when it truly mattered?

Not to mention all the other former clients of Davis, McCain’s chief advisor Charlie Black, and others in McCain’s immediate universe — a list that reads like a ship’s manifest. Check out this $57 million greatest hits at Black’s “old” firm, BKSH and Associates. If the mainstream media finally decided to fixate on just a handful of these domestic clients, like the $1.2 million BKSH made from Philip Morris, the $1.6 million from Occidental Petroleum, the $1.9 million from AT&T (much of that, no doubt, to get the telecom out of hot water over its illegal wiretapping for the Bush Administration), $860K from JP Morgan, $500K for Lockheed Martin — and $820K from Freddie Mac — who knows what other skeletons might dance out into the light?

A vacation on Capitol Hill might be just what the campaign doctor ordered. Perhaps, but I know this, the best way to gauge where the political winds might be blowing off to, is to take what Newt Gingrich has to say and head in the opposite direction. His coin of the day (referring to McCain’s latest Hail Mary) :

This is the greatest single act of responsibility ever taken by a presidential candidate and rivals President Eisenhower saying, ‘I will go to Korea.’

UPDATE: I forgot to point out, according to Michael Isikoff at Newsweek, Davis was still on the books as of April as the treasurer and clerk of Davis Manafort. When confronted with this piece of reporting, McCain’s campaign repeated that he was “functionally not affiliated with the firm.”